Morning Commentary: PHH extends gains on exchange offer; Nvidia drops outright, in line on swap

By Rebecca Melvin

New York, May 8 – U.S. convertibles were ending the week on a modestly firmer note early Friday as equities pulled higher on the back of what was seen as a generally positive April jobs report.

PHH Corp.’s 6% convertibles due 2017 were the most actively traded in the space, according to Trace data, sources pointed out. The paper was another couple of points higher at 219 in continuing action related to the Mt. Laurel, N.J.-based mortgage and fleet management services company’s exchange offer.

PHH “is the most actively traded,” a New York-based trader said.

Nvidia Corp.’s 1% convertibles due 2018 traded down on an outright basis, or 4 points to 118.65, but were seen holding in on a swap basis after the Santa Clara, Calif.-based graphics processor company posted earnings that met expectations but forecasted current quarter results below consensus.

Nvidia shares sank $1.31, or 6%, to $21.18.

Nvidia’s results are being hurt by lower personal computer and OEM sales and therefore slack demand for its graphic processor units, the company said, also blaming the strong dollar.

The Labor Department reported early Friday that U.S. payrolls rose 223,000 in April, which was in line with most expectations. March’s figure was revised lower to just 85,000 jobs, which was down from the previously reported 126,000. But the unemployment rate fell one tick to 5.4% from 5.5% in March.

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